Summary: Tesla Faces First Yearly Sales Decline; Shares Slide

Summary: Tesla Faces First Yearly Sales Decline; Shares Slide

Tesla shares fell 6.1% to $379.28 on Thursday after the company reported a significant Q4 delivery miss and its first annual sales decline since launching the Model S in 2012. Tesla delivered 495,930 vehicles globally in Q4, below Wall Street estimates of around 510,400. Annual deliveries totaled 1.78 million, down 1% from 2023's 1.81 million and missing the consensus estimate of 1.8 million.

Key Highlights:

• Fourth-Quarter Deliveries: Up 2% year-over-year but missed analyst expectations by about 20,000 units.
• Stock Performance: Tesla shares are down 21% from their December 2024 all-time high of $479.86, marking their worst five-day performance since December 2022.
• Competitive Pressure: BYD, Tesla’s main rival in China, reported 4.3 million passenger vehicle deliveries in 2024, including 1.76 million pure EVs, closely rivaling Tesla's annual figures.
• Investor Reaction: Analysts had a "whisper number" of 500,000 Q4 deliveries, a mark Tesla missed. However, optimism remains due to upcoming product launches.

Positive Developments and Outlook:
Despite lackluster delivery growth, Tesla stock rose over 60% in 2024, fueled by post-election optimism and future prospects. The company plans to launch a lower-priced EV in early 2025, expected to boost sales by 20-30% annually, and introduce an autonomous robotaxi service later in the year. Wall Street projects 2.1 million vehicle deliveries in 2025, driven by new affordable models and favorable U.S. regulatory support for self-driving technology.

Outlook:
Tesla faces growing competition, economic headwinds, and rising expectations. However, the planned rollout of a budget-friendly EV and advancements in autonomous technology could propel growth in 2025, provided execution aligns with investor expectations. Regulatory clarity and continued demand will be critical for Tesla to maintain its leadership in the EV market.